Treat Your Career Like a Business: Why Athletes Should Consider an LLC
When most people hear the word LLC, they think of business owners, gym operators, or entrepreneurs — not elite athletes.
I train, I compete, I coach. I don’t run a company.
Well, that’s not entirely true. If you’re earning money from competitions, sponsors, coaching, seminars, or content, you’re already running a small business. Setting up a Limited Liability Company (LLC) might be one of the smartest moves you can make — not only to protect your career, but to grow your wealth.
An LLC in Action
When you start cashing checks from sponsors or prize purses, you’re no longer just an athlete; you’re a business entity generating income. And without a proper business structure in place, that income flows straight to you personally — meaning your house, car, and savings could be on the line if something goes wrong.
An LLC creates a legal wall between you and your business.
Why do I need a legal wall?
As a professional athlete, you might also coach, host seminars, or post training content online. Each of these activities comes with a certain amount of risk.
A single liability claim could jeopardize your personal finances if you don’t have an LLC set up. But if you do, then your business can be sued — while your personal assets generally cannot be touched.
And even if you’re not at all worried about liability claims or lawsuits, there are other major benefits, including:
Financial Organization
Tax season becomes much easier with an LLC because it simplifies how you track income and expenses. Travel, equipment, competition fees, and even part of your home gym may be deductible business expenses. Clean books mean fewer tax surprises and better long-term financial planning.
Credibility and Professionalism
Operating under an LLC communicates that you treat your career like a professional enterprise. As a result, sponsors will automatically take you more seriously.
Five Things to Watch Out For
Though it’s easy to set up an LLC, there are some things to watch out for, including:
1. Not Creating an Operating Agreement
An operating agreement defines ownership, responsibilities, and how decisions are made. As a one-person business, yours will be simple — but still important.
2. Mixing Personal and Business Finances
Keep personal and business accounts separate. Don’t run personal expenses through business accounts (or vice versa). Track transactions, and pay yourself consistently.
3. Not Paying Taxes
You must pay your taxes on time. Set aside money monthly, and watch your due dates.
4. Not Educating Yourself About State Laws
Each state has unique LLC rules. Research your state’s requirements, file annual reports on time, and maintain a registered agent.
5. Not Keeping Accurate Records
Disorganized or missing records can cause tax trouble. Keep detailed financial and meeting records to remain compliant.
(If you’re starting to feel overwhelmed, take a deep breath — we can help guide you through the entire process.)
Taking It to the Next Level
Once you’re earning consistent income, you can opt to have your LLC taxed as an S-Corporation — a move that may help reduce self-employment taxes.
This requires paying yourself a reasonable salary and managing payroll, but it’s worth exploring once your revenue grows.
The Bottom Line
You’ve worked way too hard in the gym to miss out on protecting and optimizing the money you’re earning as an athlete. Forming an LLC helps you safeguard what you’ve built and grow your career both on and off the competition floor.
Reach out to us with any questions you might have, we are here to help.